Latin America: Terrorism Issues

Mark P. Sullivan Specialist in Latin American Affairs January 5, 2012 CRS Report for Congress Prepared for Members and Committees of Congress Congressional Research Service 7-5700 www.crs.gov RS21049

Summary U.S. attention to terrorism in Latin America intensified in the aftermath of the September 2001 terrorist attacks on New York and Washington, with an increase in bilateral and regional cooperation. In its 2010 Country Reports on Terrorism (issued in August 2011), the State Department maintained that terrorism in the region was primarily perpetrated by terrorist organizations in Colombia and by the remnants of radical leftist Andean groups. Overall, however, the report maintained that the threat of a transnational terrorist attack remained low for most countries in the hemisphere. With regard to concerns about drug trafficking-related violence in Mexico, the State Department terrorism report asserted that there was no evidence of ties between Mexican criminal organizations and terrorist groups, nor that the criminal organizations had aims of political or territorial control, aside from seeking to protect and expand the impunity with which they conduct their criminal activity. Cuba has remained on the State Department s list of state sponsors of terrorism since 1982 pursuant to Section 6(j) of the Export Administration Act, which triggers a number of economic sanctions. Both Cuba and Venezuela are on the State Department s annual list of countries determined to be not cooperating fully with U.S. antiterrorism efforts pursuant to Section 40A of the Arms Export Control Act. U.S. officials have expressed concerns over the past several years about Venezuela s lack of cooperation on antiterrorism efforts, its relations with Iran, and potential support for Colombian terrorist groups. Concerns about Iran s increasing activities in Latin America center on Iran s attempts to circumvent U.N. and U.S. sanctions, as well as on its ties to the radical Lebanon-based Islamic group Hezbollah. Allegations have linked Hezbollah to two bombings in Argentina: the 1992 bombing of the Israeli Embassy in Buenos Aires that killed 30 people and the 1994 bombing of the Argentine-Israeli Mutual Association (AMIA) in Buenos Aires that killed 85 people. The State Department terrorism report maintains that there are no known operational cells of either Al Qaeda or Hezbollah-related groups in the hemisphere, but noted that ideological sympathizers in South America and the Caribbean continued to provide financial and moral support to these and other terrorist groups in the Middle East and South Asia. In the 112 th Congress, several legislative initiatives have been introduced related to terrorism issues in the Western Hemisphere regarding Mexico, Venezuela, and the activities of Iran and Hezbollah, and several oversight hearings have been held related to these topics. H.R. 3401 (Mack), marked up by the House Subcommittee on the Western Hemisphere on December 15, 2011, would require the Secretary of State to submit a detailed counterinsurgency strategy to combat the terrorist insurgency in Mexico waged by transnational criminal organizations. Supporters of the bill argue that terrorist tactics are being employed by Mexican drug trafficking organizations, and that the United States needs to use appropriate counterinsurgency tactics to combat these groups. Opponents argue that Mexico is not facing a terrorist insurgency by groups with political goals, and contend that pushing for a counterinsurgency strategy could undermine the strong U.S. security relationship developed with Mexico. Among other introduced initiatives, H.R. 1270 (McCaul) would direct the Secretary of State to designate as foreign terrorist organizations six Mexican drug cartels; H.Res. 247 (Mack) would call for the designation of Venezuela as a state sponsor of terrorism; and H.Res. 429 (Duncan) would call on the Administration to develop a comprehensive counterterrorism and counter-radicalization strategy to defend United States geostrategic interests and defeat Iranian interests in the Western Hemisphere. Congressional Research Service

Contents Terrorism in Latin America: U.S. Concerns... 1 Colombia... 2 Peru... 4 Cuba... 5 Venezuela... 7 Venezuela and FARC-Related Sanctions... 7 Growing Relations with Iran... 8 Venezuela and Iran-Related Sanctions... 10 Venezuela and Hezbollah-Related Sanctions... 12 Tri-Border Area of Argentina, Brazil, and Paraguay... 12 U.S. Policy... 14 Increased Regional Cooperation Since 9/11... 16 Legislative Initiatives and Oversight... 17 111 th Congress... 17 112 th Congress... 18 Conclusion... 20 Figures Figure 1. Colombia and Neighboring Countries... 3 Figure 2. Tri-Border Area of Argentina, Brazil, and Paraguay... 13 Contacts Author Contact Information... 21 Congressional Research Service

Terrorism in Latin America: U.S. Concerns Over the years, the United States has been concerned about threats to Latin American and Caribbean nations from various terrorist or insurgent groups that have attempted to influence or overthrow elected governments. Although Latin America has not been the focal point in the war on terrorism, countries in the region have struggled with domestic terrorism for decades and international terrorist groups have at times used the region as a battleground to advance their causes. The State Department s annual Country Reports on Terrorism highlights U.S. concerns about terrorist threats around the world, including in Latin America. The 2010 report (issued in August 2011) maintained that terrorist attacks in the region was primarily perpetrated by terrorist organizations in Colombia and by the remnants of radical leftist Andean groups. Overall, however, the report maintained that the threat of a transnational terrorist attack remained low for most countries in the hemisphere. The report also asserted that there were no known operational cells of either Al Qaeda or Hezbollah-related groups in the hemisphere, but noted that ideological sympathizers in South America and the Caribbean continued to provide financial and moral support to these and other terrorist groups in the Middle East and South Asia. With regard to concerns about rising drug trafficking-related violence in Mexico, the State Department report asserted that there was no evidence of ties between Mexican criminal organizations and terrorist groups, nor that the criminal organizations had aims of political or territorial control, aside from seeking to protect and expand the impunity with which they conduct their criminal activity. 1 The report also stated that regional governments took modest steps to improve their counterterrorism capabilities and tighten border security but that progress was limited by corruption, weak government institutions, insufficient interagency cooperation, weak or nonexistent legislation, and reluctance to allocate sufficient resources. The report singled out Argentina, Colombia, and Mexico for undertaking serious prevention and preparedness efforts, and noted that most countries began to look seriously at possible connections between transnational criminal organizations and terrorist organizations. It also noted that most hemispheric nations had solid cooperation with the United States on terrorism issues, especially at the operational level, with excellent intelligence, law enforcement, and legal assistance relations. The report cited the Inter-American Committee Against Terrorism (CICTE) at the Organization of American States as important for U.S. cooperation on terrorism with the region. The State Department currently lists two Latin American countries Cuba and Venezuela on its annual list of countries that are not cooperating fully with United States antiterrorism efforts pursuant to Section 40A of the Arms Export Control Act. The most recent annual determination was made in May 2011. 2 In addition, Cuba has been on the State Department s state sponsors of terrorism list pursuant to Section 6(j) of the Export Administration Act (EAA) of 1979 since 1982. The state sponsors of terrorism list is not an annual list. Rather, countries remain on the list until either the President or Congress take action to remove a country. The EAA sets forth procedures for the President to remove a country from the list. 1 U.S. Department of State, Country Reports on Terrorism 2010, August 18, 2011, available at http://www.state.gov/s/ct/rls/crt/2010/index.htm 2 Department of State, Determination and Certification Under Section 40A of the Arms Export Control Act, 76 Federal Register 31390, May 31, 2011. Congressional Research Service 1

Colombia Colombia has three terrorist groups that have been designated by the Secretary of State as Foreign Terrorist Organizations (FTOs): the leftist National Liberation Army (ELN), remaining elements of the demobilized rightist paramilitary United Self-Defense Forces of Colombia (AUC), and the leftist Revolutionary Armed Forces of Colombia (FARC). The ELN reportedly has a dwindling membership of about 1,250 fighters with diminished resources and reduced offensive capability, but has continued to inflict casualties through the use of land mines and ambushes and continues to fund its operations through drug trafficking, kidnapping, and extortion, according to the State Department s 2010 terrorism report. Past peace talks between the ELN and the Colombian government ended in 2008. With more than 32,000 members demobilized, the AUC remained inactive as a formal organization, but some former AUC paramilitaries continued to engage in criminal activities, mostly drug trafficking, in newly emerging criminal organizations (known as BACRIM, Bandas Criminales Emergentes). Estimates of the membership of these BACRIM range from over 3,500 to 6,000 or more. According to the terrorism report, the Colombian government continued to process and investigate demobilized paramilitaries under the Justice and Peace Law, which offers judicial benefits and reduced prison sentences for participants who confess fully to their crimes and return all illicit profits. Many former AUC members also were receiving some reintegration benefits. Over the past several years, the FARC has been weakened significantly by the government s military campaign against it, including the killings of several FARC commanders in 2007 and the group s second in command, Raúl Reyes, during a Colombian government raid on a FARC camp in Ecuador on March 1, 2008. In May 2008, the FARC admitted that its long-time leader, Manuel Marulanda, had died of a heart attack in March. In July 2008, a Colombian military operation in the southeastern province of Guaviare rescued 15 long-held hostages, including three U.S. defense contractors held since February 2003 Thomas Howes, Keith Stansell, and Marc Gonsalves; Colombian Senator and presidential candidate Ingrid Betancourt; and other Colombians. The Colombian military dealt a significant blow to the terrorist group in September 2010 when it killed a top military commander, Victor Julio Suárez (aka Mono Joyoy ) in a bombing raid on his camp in a mountainous region of Meta department in central Colombia. Even more significantly, in early November 2011, the Colombian military killed FARC leader Alfonso Cano in a bombing raid in the department of Cauca in southwestern Colombia. In the aftermath of Cano s death, Rodrigo Londoño, also know as Timoleón Jiménez or Timonchenko, a long-time member of the FARC Secretariat, was chosen as the FARC s new leader in mid-november 2011. The FARC is still estimated to have a strength of around 8,000, with the group responsible for terrorist attacks, extortion, and kidnappings. In late November 2011, the FARC executed four hostages who had been held for more than a decade when the Colombian military approached a guerrilla camp in the southern department of Caqueta. Colombian terrorist groups continue to utilize territory of several of Colombia s neighbors Ecuador, Panama, Peru, and Venezuela according to the State Department s terrorism report (see Figure 1). The FARC has training and logistical supply camps along Ecuador s northern border with Colombia. While Ecuador s relations with Colombia became tense in the aftermath of Colombia s March 2008 military raid on a FARC camp in Ecuador s Sucumbios province, Ecuador s military subsequently increased the number of operations against the FARC in its Congressional Research Service 2

northern border region. Nevertheless, according to the 2010 terrorism report, resource constraints and limited capabilities affected Ecuador s actions. Under new Colombian President Juan Manuel Santos, the two countries made progress in improving bilateral relations, and restored diplomatic relations in December 2010. Figure 1. Colombia and Neighboring Countries Source: CRS. Notes: The map shows Colombia s departments and the bordering departments, provinces, and states of neighboring Ecuador, Peru, Brazil, Venezuela, and Panama. Congressional Research Service 3

In Panama, a small number of FARC members from the group s 57 th Front were reported to operate in the country s Darien province bordering Colombia, using the area as a safe haven. In January 2010, three FARC members were killed and two were captured in a clash with Panamanian forces in Darien, while late in 2010, Panama and Colombia agreed to establish police stations near each side of the border. In Peru, the FARC was reported to use remote areas along the Colombian-Peruvian border to rest, regroup, and make arms purchases. According to the State Department terrorism report, experts contend that the FARC continued to fund coca cultivation and cocaine production among the Peruvian population in border areas. As described in the 2010 terrorism report, the Colombian government of President Alvaro Uribe publicly accused the Venezuelan government several times during the year of harboring members of the FARC and ELN in its territory. In July 2010, the Uribe government presented evidence at the OAS of FARC training camps in Venezuela. In response, Venezuela suspended diplomatic relations on July 22, 2010, yet less than three weeks later new Colombian President Santos met with Venezuelan President Chávez and the two leaders agreed to reestablish diplomatic relations and to improve military patrols along their border. In congressional testimony on February 15, 2011, Assistant Secretary of State for Western Hemisphere Affairs Arturo Valenzuela maintained that there was reduced Venezuelan support for the FARC since President Santos has reached out to Venezuela. 3 Since then, Venezuela has captured and returned to Colombia several members of the FARC. In October 2011 congressional testimony, a U.S. official maintained that there continues to be evidence that the FARC are sheltering in Venezuela, but not as close to the border as before. 4 (Also see section on Venezuela below.) For additional information, see CRS Report RL32250, Colombia: Issues for Congress, by June S. Beittel. Peru The brutal Shining Path (Sendero Luminoso or SL) insurgency, which the Department of State has designated as an FTO, was significantly weakened in the 1990s with the capture of its leader Abimael Guzman, who, after a new trial in 2006, was sentenced to life in prison. According to the 2010 State Department terrorism report, there are two remaining SL factions in Peru, one operating in the Upper Huallaga River Valley led by Florindo Eleuterio Flores Hala (also known as Comrade Artemio), and the other operating in the Apurimac and Ene River Valley led by Victor Quispe Palomino. Both groups engage in drug trafficking, and in 2010 carried out 136 terrorist acts, with killings of police, civilians, and military members. In 2010, the State Department added the leaders of both SL factions to its Narcotics Reward Program offering up to $5 million for information leading to the arrest and/or conviction of each leader. In early December 2011, the SL faction led by Flores Hala called for a truce with the government and talks, although observers 3 House Foreign Affairs Subcommittee on Western Hemisphere Holds Hearing on U.S.-Latin America Relations, CQ Congressional Transcripts, February 15, 2011. 4 See testimony of Kevin Whitaker, Deputy Assistant Secretary of State for Western Hemisphere Affairs in The Senate Caucus on International Narcotics Control Holds a Hearing on U.S.-Andean Security Cooperation, News Event, Political Transcripts by CQ Transcriptions, October 19, 2011. Congressional Research Service 4

maintain that prospects are slim for either. 5 (Also see discussion above on the FARC s activities in border areas with Colombia.) Cuba The Department of State, pursuant to Section 6(j) of the Export Administration Act (EAA) of 1979, has included Cuba among its list of states sponsoring terrorism since 1982 (the other states currently on the list are Iran, Sudan, and Syria). Communist Cuba had a history of supporting revolutionary movements and governments in Latin America and Africa, but in 1992, then Cuban leader Fidel Castro said that his country s support for insurgents abroad was a thing of the past. Most analysts accept that Cuba s policy generally did change, largely because the breakup of the Soviet Union resulted in the loss of billions in subsidies. The State Department s 2010 terrorism report (issued in August 2011) stated that the Cuban government maintained a public stance against terrorism and terrorist financing, but there was no evidence that it had severed ties with elements from the Revolutionary Armed Forces of Colombia (FARC) and recent media reports indicate some current and former members of the Basque Fatherland and Liberty (ETA) continue to reside in Cuba. The report further stated that available information suggested that the Cuban government maintained limited contact with FARC members, but there was no evidence of direct financial or ongoing material support. It maintained that Cuba allowed Spanish police to travel to Cuba to confirm the presence of suspected ETA members. As in previous years, the report maintained that Cuba continued to denounce U.S. counterterrorism efforts worldwide. The 2010 terrorism report also maintained that Cuba has been used as a transit point by thirdcountry nationals to enter the United States illegally, and that Cuba was aware of the concerns posed by such threats and took action to investigate third country migrant smuggling and related criminal activities. The report noted that the Cuban government allowed representatives of the U.S. Transportation Security Administration to conduct a series of airport security visits throughout the country in November 2010. Cuba s retention on the terrorism list has been questioned by some observers. In general, those who support keeping Cuba on the list point to the government s history of supporting terrorist acts and armed insurgencies in Latin America and Africa. They point to the government s continued hosting of members of foreign terrorist organizations and U.S. fugitives from justice. Critics of retaining Cuba on the terrorism list maintain that it is a holdover of the Cold War. They argue that domestic political considerations keep Cuba on the terrorism list, while North Korea and Libya (before the overthrow of the Qadhafi regime) were removed, and maintain that Cuba s presence on the list diverts U.S. attention from struggles against serious terrorist threats. Both the President and Congress have powers to take a country off the state sponsors of terrorism list. As set forth in Section 6(j) of the Export Administration Act, a country s retention on the list may be rescinded in two ways. The first option is for the President to submit a report to Congress certifying that there has been a fundamental change in the leadership and policies of the government and that the government is not supporting acts of international terrorism and is providing assurances that it will not support such acts in the future. The second option is for the 5 Geoffrey Ramsey, Shining Path Rebel Leader Calls for Truce with Peru s Govt, Insight, Organized Crime in the Americas, December 8, 2011; Peru Cautious About Sendero Overture, Latin News Daily Report, December 8, 2011. Congressional Research Service 5

President to submit a report to Congress, at least 45 days in advance justifying the rescission and certifying that the government has not provided any support for international terrorism during the preceding six-months, and has provided assurances that it will not support such acts in the future. If Congress disagrees with the President s decision to remove a country from the list, it could seek to block the rescission through legislation. Congress also has the power on its own to remove a country from the terrorism list. For example, legislation introduced on Cuba in the 111 th Congress, H.R. 2272 (Rush), included a provision that would have rescinded the Secretary of State s determination that Cuba has repeatedly provided support for acts of international terrorism. Cuba has been the target of various terrorist incidents over the years. In 1976, a Cuban plane was bombed, killing 73 people. In 1997, there were almost a dozen bombings in the tourist sector in Havana in which an Italian businessman was killed and several others were injured. Two Salvadorans were convicted and sentenced to death for the 1997 bombings in March 1999 (although the sentences were commuted in 2010 to 30 years in prison), and three Guatemalans were sentenced to prison terms ranging from 10 to 15 years in January 2002 for plans to conduct bombings in 1998. In December 2010, another Salvadoran, Francisco Chávez Abarca, was convicted for involvement in the 1997 bombings in Havana and sentenced to 30 years in prison. In November 2000, four anti-castro activists were arrested in Panama for a plot to kill Fidel Castro. One of the accused, Luis Posada Carriles, is also alleged to be involved in the 1976 Cuban airline bombing and the series of bombings in Havana in 1997 noted above. 6 The four stood trial in March 2004 and were sentenced on weapons charges to prison terms ranging from seven to eight years. In late August 2004, Panamanian President Mireya Moscoso pardoned the four men before the end of her presidential term. Posada entered the United States illegally in 2005. In subsequent removal proceedings, an immigration judge found that Posada could not be removed to Cuba or Venezuela because of concerns that he would face torture, and he was thereafter permitted to remain in the United States pending such time as he could be transferred to a different country. Posada subsequently applied for naturalization to become a U.S. citizen. This application was denied, and criminal charges were brought against him for allegedly false statements made in his naturalization application and interview. Although a federal district court dismissed the indictment in 2007, its ruling was reversed by an appellate court in 2008. In April 2009, the United States filed a superseding indictment, which included additional criminal charges based on allegedly false statements made by Posada in immigration removal proceedings concerning his involvement in the 1997 Havana bombings. His trial originally was set to begin in August 2009, but was rescheduled three times until it finally began in January 2011. 7 Ultimately, Posada was acquitted of the perjury charges in April 2011, an action that was strongly criticized by Cuban officials. For additional information on Cuba, see CRS Report R41617, Cuba: Issues for the 112 th Congress. For background, see CRS Report RL32251, Cuba and the State Sponsors of Terrorism List. 6 Frances Robles, An Old Foe of Castro Looks Back on His Fight, Miami Herald, September 4, 2003. 7 For additional information, see Background on Luis Posada Carriles, CRS Congressional Distribution Memorandum, December 8, 2010, prepared by Mark P. Sullivan, Specialist in Latin American Affairs, and Michael John Garcia, Legislative Attorney. Available from the authors. Congressional Research Service 6

Venezuela 8 U.S. officials have expressed concerns over the past several years about Venezuela s lack of cooperation on antiterrorism efforts, President Hugo Chávez s sympathetic statements for Colombian terrorist groups, and Venezuela s relations with Iran. Since May 2006, the Secretary of State has made an annual determination that Venezuela has not been cooperating fully with United States antiterrorism efforts pursuant to Section 40A of the Arms Export Control Act (AECA). The most recent determination was made in May 2011. As a result, the United States imposed an arms embargo on Venezuela in 2006, which ended all U.S. commercial arms sales and retransfers to Venezuela. (Other countries currently on the Section 40A list include Cuba, Eritrea, Iran, North Korea, and Syria, not to be confused with the state sponsors of terrorism list under Section 6(j) of the Export Administration Act of 1979.) In June 2011 congressional testimony, State Department officials again expressed concern about Venezuela s relations with Iran, its support for the FARC, [and] its lackluster cooperation on counterterrorism. 9 In its 2010 terrorism report (issued in August 2011), the State Department maintained that the Venezuelan government took no action against Venezuelan government and military officials linked to the FARC and ELN, Colombia s two guerrilla insurgent groups. While it described Colombia s accusations against the Venezuela government for harboring the FARC and ELN, the report also noted an improved bilateral Colombian-Venezuelan relationship on security issues under the new government of Colombian President Juan Manuel Santos, including Venezuela s extradition to Colombia of several suspected members of the terrorists groups. According to June 2011, State Department congressional testimony, Colombian-Venezuelan cooperation on terrorism and security matters is clearly increasing and being systematized, yielding notable results. The State Department noted Venezuela s deportation of several FARC and ELN members to Colombia, including key operatives and high-profile political actors. It said that President Chávez has called on the FARC to join a political reconciliation process and has claimed that any discussion between Venezuelan government officials and the FARC about establishing bases in Venezuela took place without his authorization. 10 As discussed above, a U.S. official testified in October 2011 there continues to be evidence that the FARC are sheltering in Venezuela, but not as close to the border as before. (See Colombia above.) Venezuela and FARC-Related Sanctions To date, the United States has imposed financial sanctions against seven current or former Venezuelan government and military officials for providing support to the FARC. In September 2008, the Treasury Department froze the assets of two senior intelligence officials General 8 For additional background on Venezuela, see CRS Report R40938, Venezuela: Issues for Congress, by Mark P. Sullivan. 9 Joint Hearing on Venezuela s Sanctionable Activities, House Committee on Foreign Affairs, Subcommittee on the Western Hemisphere and Subcommittee on the Middle East and South Asia, and House Committee on Oversight and Government Reform, Subcommittee on National Security, Homeland Defense and Foreign Operations. State Department testimony of Ambassador Daniel Benjamin, Coordinator for Counterterrorism; Kevin Whitaker, Acting Deputy Assistant Secretary for Western Hemisphere Affairs; and Thomas Delare, Director of the Terrorist Finance and Economic Sanctions Policy, Bureau of Economic, Energy, and Business Affairs, June 24, 2011, available at http://foreignaffairs.house.gov/112/ben062411.pdf 10 Ibid. Congressional Research Service 7

Hugo Carvajal and General Henry Rangel and the former interior minister, Ramón Rodríguez Chacín, for allegedly helping the FARC with weapons and drug trafficking. 11 In September 2011, the Treasury Department imposed financial sanctions on four more Venezuelan officials for acting for or on behalf of the FARC, often in direct support of its narcotics and arms trafficking activities: Amilcar Jesus Figueroa Salazar, a member of Venezuela s delegation to the Latin American Parliament; Major General Cliver Antonio Alcala Cordones of the Venezuelan Army; Freddy Alirio Bernal Rosales, a national legislator for the United Socialist Party of Venezuela (PSUV); and Ramon Isidro Madriz Moreno, an officer of Venezuela s intelligence service. 12 Growing Relations with Iran There has been increasing concern in recent years about Iran s growing interest in Latin America, particularly its relations with Venezuela under President Chávez. Venezuela s relations with Iran have been long-standing because they were both founding members of OPEC in 1960, but not until President Mahmoud Ahmadinejad s rule began in 2005, however, did Iran aggressively work to increase its diplomatic and economic linkages with Latin American countries. A major rationale for this increased focus on Latin America appears to be Iran s efforts to overcome its international isolation. The personal relationship between Ahmadinejad and Chávez has driven the strengthening of bilateral ties. The two nations have signed a variety of agreements in agriculture, petrochemicals, oil exploration in the Orinoco region of Venezuela, and the manufacturing of automobiles, bicycles, and tractors. During an April 2009 trip to Tehran, Chávez and Ahmadinejad inaugurated a new development bank for economic projects in both countries, with each country reportedly providing $100 million in initial capital. Weekly flights between the two countries began in 2007, but were curtailed in September 2010. 13 In past years, the State Department had expressed concern about these flights in the annual terrorism report, maintaining that the flights were only subject to cursory immigration and customs controls. An April 2010 unclassified Department of Defense report to Congress on Iran s military power (required by Section 1245 of the National Defense Authorization Act for FY2010, P.L. 111-84) maintained that Iran s Islamic Revolutionary Guard Corps Qods Force (IRGC-QF), which maintains operational capabilities around the world, has increased its presence in Latin America in recent years, particularly in Venezuela. 14 Despite the report, the commander of the U.S. Southern Command, General Douglas Fraser, maintains that the focus of Iran in the region has been diplomatic and commercial, and that he has not seen an increase in Iran s military presence in the region. 15 11 Phil Gunson, op. cit., September 13, 2008; Federal Register, September 19, 2008, pp. 54453-54454. 12 U.S. Department of the Treasury, Treasury Designates Four Venezuelan Officials for Providing Arms and Security to the FARC, Press Center, September 8, 2011. 13 House Foreign Affairs Subcommittee on Middle East and South Asia and Subcommittee on Western Hemisphere and House Oversight and Government Reform Subcommittee on National Security, Homeland Defense and Foreign Operations Hold Joint Hearing on Venezuela s Sanctionable Activity, CQ Congressional Transcripts, June 24, 2011; and House Foreign Affairs Committee Holds Hearing on Threats and Security in the Western Hemisphere, CQ Congressional Transcripts, October 13, 2011. 14 Department of Defense, Unclassified Report on Military Power of Iran, April 2010. For the full text of the report, see http://www.politico.com/static/ppm145_link_042010.html. For background on the Qods Force, see CRS Report RL32048, Iran: U.S. Concerns and Policy Responses, by Kenneth Katzman. 15 Anne Flaherty, Pentagon Says Iran s Reach in Latin America Doesn t Pose Military Threat, AP Newswire, April 27, 2010. General Fraser reiterated that Iran s focus in Latin America has been primarily diplomatic and commercial: in March 30, 2011, testimony before the House Armed Services Committee. See: Hearing of the House Armed (continued...) Congressional Research Service 8

Venezuela also has played a key role in the development of Iran s expanding relations with other countries in the region. In recent years, Iran s relations have grown with Bolivia under President Evo Morales, with Ecuador under President Rafael Correa, and with Nicaragua under President Daniel Ortega. While Iran has promised significant assistance and investment to these countries, observers maintain that there is little evidence to show that such promises have been fulfilled. 16 In Nicaragua for example, Iran has not followed through on its promise to finance the construction of a deep-water port. An Iranian project that has gone forward in Nicaragua is the construction of a hospital in 2009. 17 Likewise in Bolivia and Ecuador, there has been little evidence showing that Iran has followed up on its promises of investment. Nevertheless, in late August 2010, Iran announced that it would provide a $250 million loan to Bolivia for the construction of dairy, textile cement, and other plants, and geological prospecting for minerals such as uranium and lithium. 18 According to February 2011 testimony by Director of National Intelligence James Clapper, we expect Tehran to continue offering economic and other incentives to try to expand its outreach. 19 On the diplomatic front, Iran has opened embassies over the past several years in Bolivia, Ecuador, and Nicaragua, as well as in Colombia, Chile, and Uruguay. This is in addition to existing embassies in Cuba, Argentina, Brazil, Mexico, and Venezuela. 20 Reports that Iran was building a large embassy in Managua, Nicaragua (which even Secretary of State Hillary Clinton noted in public remarks) turned out to be erroneous. 21 As noted above, President Ahmadinejad has visited Venezuela several times, and has also visited Bolivia, Brazil, Nicaragua, and Cuba. In early May 2009, a scheduled first trip by Ahmadinejad to Brazil was unexpectedly postponed until after Iran s election in June. There had been some protests in Brazil against Ahmadinejad s visit, but the trip ultimately took place in November 2009. Brazilian President Lula da Silva maintains that the West should not isolate Iran. On the same trip, the Iranian president once again visited Bolivia and Venezuela. 22 Iranian President Ahmadinejad is once again scheduled to visit the region beginning on January 8, 2012, first with a stop in Venezuela to visit President Chávez followed by attendance at the presidential inauguration of Daniel Ortega in Nicaragua on January 10. The Iranian president will (...continued) Services Committee; Subject FY2012 National Defense Authorization Budget Requests for the U.S. Southern Command, U.S. Northern Command, and U.S. European Command, Federal News Service, March 30, 2011. 16 For example, see Kavon Hak Hakimzadeh, Iran & Venezuela: The Axis of Annoyance, Military Review, May 1, 2009; and Anne-Marie O Connor and Mary Beth Sheridan, Iran s Invisible Nicaragua Embassy; Feared Stronghold Never Materialized, Washington Post, July 13, 2009. Also see House Foreign Affairs Committee Holds Hearing on Democracy in Nicaragua, CQ Congressional Transcripts, December 1, 2011. 17 Steve Stecklow and Farnaz Fassihi, Iran s Global Foray Has Mixed Results, Wall Street Journal, September 28, 2009. 18 Iran Announces 250m Dollar-Loan to Bolivia to Assist Uranium Prospecting, BBC Monitoring Americas, September 1, 2010. 19 James R. Clapper, Director of National Intelligence, Statement for the Record on the Worldwide Threat Assessment of the U.S. Intelligence Community, House Permanent Select Committee on Intelligence, February 10, 2011, available at http://intelligence.house.gov/sites/intelligence.house.gov/files/documents/dnisfr021011.pdf 20 Anne-Marie O Connor and Mary Beth Sheridan, Iran s Invisible Nicaragua Embassy; Feared Stronghold Never Materialized, Washington Post, July 13, 2009. 21 Ibid; and Sylvie Lanteaume, Iran s Hand in Latin America Not as U.S. Feared, Agence France Presse, July 14, 2009. 22 Juan Forero, Ahmadinejad Boosts Latin American Ties, Washington Post, November 28, 2009. Congressional Research Service 9

then reportedly visit Cuba and Ecuador. The probable purpose of the trip is to shore up relations with these countries as a means of overcoming Iran s international isolation. As in the past, the trip is likely to increase concerns among those concerned about Iran s growing relations with the region. Venezuela and Iran-Related Sanctions To date, the United States has imposed sanctions on two companies in Venezuela because of connections to Iran s proliferation activities. In August 2008, the State Department imposed sanctions on the Venezuelan Military Industries Company (CAVIM) pursuant to the Iran, North Korea, and Syria Nonproliferation Act (P.L. 109-353) for allegedly violating a ban on technology that could assist Iran in the development of weapons systems. 23 The sanctions prohibited any U.S. government procurement or assistance to the company. While these sanctions expired in 2010, they were imposed once again on May 23, 2011, for a two-year period. 24 In October 2008, the U.S. Treasury Department imposed sanctions on an Iranian-owned bank based in Caracas, the Banco Internacional de Desarollo, C.A., under Executive Order 13382 that allows the President to block the assets of proliferators of weapons of mass destruction and their supporters. The bank is linked to the Export Development Bank of Iran (EDBI), which the Treasury Department asserts has provided or attempted to provide services to Iran s Ministry of Defense and Armed Forces Logistics. 25 In September 2009, during President Chávez s visit to Tehran, Venezuela and Iran signed several energy sector memorandums of understanding. As reported in the press, one of these agreements would provide for Venezuela s state-owned oil company, Petroleos de Venezuela S.A. (PdVSA), to acquire a 10% stake in Iran s South Pars gas project valued at some $760 million. Such investment, if it occurs, would appear to subject PdVSA to sanctions under the Iran Sanctions Act (P.L. 104-172). Under another accord, Venezuela agreed to help Iran circumvent any potential U.S. or U.N. sanctions against Iranian gasoline imports by supplying Iran with gasoline (reportedly some 20,000 barrels per day) with the money earned from the gasoline sales to be deposited to a fund that would be set up by Iran to finance Venezuelan purchases of Iranian machinery and technology. 26 Under Iran sanctions legislation signed into law July 1, 2010 (P.L. 111-195, Comprehensive Iran Sanctions, Accountability, and Disinvestment Act of 2010), gasoline sales to Iran valued at more than $1 million (or $5 million over a 12-month period) would subject PdVSA to U.S. sanctions. 27 Assistant Secretary of State for Western Hemisphere Affairs Arturo Valenzuela maintained in congressional testimony on February 15, 2011, that the United States was examining the issue of whether Venezuela was in violation of the Iran sanctions legislation. 28 Secretary of State Clinton indicated in congressional testimony on March 1, 2011, that the Administration would act if there 23 Although the sanction became effective in August 2008, it was not published in the Federal Register until October 2008. See Federal Register, pp. 63226-63227, October 23, 2008. 24 U.S. Department of State, Iran, North Korea and Syria Nonproliferation Act (INKSNA), Fact Sheet, May 24, 2011. 25 U.S. Department of the Treasury, Press Release, Export Development Bank of Iran Designated as a Proliferator, October 22, 2008. 26 Venezuela Pledges to Help Iran with Investment, Gasoline Supplies, The Oil Daily, September 10, 2009. 27 For further information, see CRS Report RS20871, Iran Sanctions, by Kenneth Katzman. 28 House Foreign Affairs Subcommittee on Western Hemisphere Holds Hearing on U.S.-Latin America Relations, CQ Congressional Transcripts, February 15, 2011. Congressional Research Service 10

were evidence that Venezuela was in violation of U.S. sanctions on Iran. 29 Subsequently, on May 24, 2011, the State Department imposed sanctions on PdVSA for providing cargoes of reformate, an additive used in gasoline, to Iran between December 2010 and March 2011 valued at around $50 million. Specifically, the State Department imposed three sanctions on PdVSA to prohibit it from competing for U.S. government procurement contracts, securing financing from the Export- Import Bank, and obtaining U.S. export licenses. The sanctions specifically exclude PdVSA subsidiaries (Citgo) and do not prohibit the export of oil to the United States. 30 Venezuelan comments about support for Iran s nuclear program and about potential Iranian support for the development of nuclear energy in Venezuela have raised concerns among U.S. officials and other observers. President Chávez repeatedly has expressed support for Iran s development of nuclear energy for peaceful purposes, including most during a September 2009 visit to Iran. 31 President Chávez also announced during the visit that Venezuela is working on a preliminary plan for the construction of a nuclear village in Venezuela with Iranian assistance so that the Venezuelan people can count in the future on this marvelous resource for peaceful purposes. 32 The transfer of Iranian nuclear technology from Iran would be a violation of U.N. Security Council Resolutions 1737 (2006), 1747 ( 2007), and 1803 (2008) that imposed restrictions on Iran s nuclear technology transfers. In September 2010, President Chávez maintained that his government was carrying out initial studies into starting a nuclear energy program. In October 2010, Russia agreed to help Venezuela build its first nuclear power plant, but in March 2011, in the aftermath of Japan s nuclear plant disaster, President Chávez said that he was freezing plans for a nuclear power program. 33 In late September 2009, comments by Venezuelan officials offered conflicting information about Iran s support for Venezuela s search for uranium deposits. Venezuelan Minister of Basic Industry and Mining Rodolfo Sanz said that Iran was assisting Venezuela in detecting uranium reserves in the west and southwest of Venezuela. 34 Subsequently, however, Venezuela s Minister of Science, Technology, and Intermediary Industry Jesse Chacon denied that Iran was helping Venezuela seek uranium, while Venezuela s Minister of Energy Rafael Ramirez maintained that Venezuela has yet to develop a plan to explore or exploit its uranium deposits. 35 U.N. Security Council Resolution 1929 (June 9, 2010) bars Iranian investment in uranium mining projects abroad. In November 2010 and again in May 2011, an online German publication, Die Welt, alleged that Venezuela and Iran had signed an agreement in October 2010 for a jointly operated missile base 29 House Foreign Affairs Committee Holds Hearing on U.S. Foreign Policy Priorities, CQ Congressional Transcripts, March 1, 2011. 30 U.S. Department of State, Seven Companies Sanctioned Under the Amended Iran Sanctions Act, Fact Sheet, May 24, 2011. 31 Visiting Chávez Backs Iran Nuclear Programme, Tehran Press TV Online, September 5, 2009. 32 Iran Will Not Back Down on Nuclear Energy: Hugo Chávez Agence France Presse, September 4, 2009. 33 Hugo Chávez Says Venezuela Is Studying Idea of Starting Peaceful Nuclear Energy Program, AP Newswire, September 28, 2010; Russia to Build Nuclear Power Plant in Venezuela, Reuters News, October 15, 2010; Diego Ore, Venezuela Halts Nuclear Program After Japan Disaster, Reuters News, March 15, 2011. 34 See the following press reports: Iran Helps Venezuela Find Uranium Deposits, BBC Monitoring Caucasus, September 26, 2009; and Iran Helps Venezuela Find Uranium Deposits, Tehran Press TV Online, September 26, 2009. 35 Venezuela Denies Iran is Helping It, New York Times, September 27, 2009; and Fabian Cambero, Interview: Venezuela Says No Plans Yet on Exploring Uranium, Reuters, September 27, 2009. Congressional Research Service 11

in Venezuela. 36 The Department of State, however, maintains that there is no evidence to support such claims, and that that there is no reason to believe that the assertions are credible. 37 Venezuela s foreign minister also called the reports by the German newspaper an extravagant lie. 38 Venezuela and Hezbollah-Related Sanctions Another reason for U.S. concerns about Iran s deepening relations with Venezuela is Iran s ties to the radical Lebanon-based Islamic group Hezbollah, a State Department-designated Foreign Terrorist Organization supported by Iran, which is reported to have been linked to two bombings against Jewish targets in Argentina in the early 1990s (see Tri-Border Area of Argentina, Brazil, and Paraguay below). On June 18, 2008, the U.S. Treasury Department s Office of Foreign Assets Control (OFAC) announced that it was freezing the U.S. assets of two Venezuelans Ghazi Nasr al Din (a Venezuelan diplomat serving in Lebanon) and Fawzi Kan an for providing financial and other support to Hezbollah. U.S. citizens are also prohibited from engaging in any transactions with the two Venezuelans, including any business with two travel agencies in Caracas owned by Kan an. The State Department s 2010 terrorism report continues to express concern about Hezbollah s fundraising activities in Venezuela. Tri-Border Area of Argentina, Brazil, and Paraguay 39 In recent years, U.S. concerns have increased over activities of Hezbollah and the Sunni Muslim Palestinian group Hamas (Islamic Resistance Movement) in the tri-border area (TBA) of Argentina, Brazil, and Paraguay, which has a large Muslim population. The TBA has long been used for arms and drug trafficking, contraband smuggling, document and currency fraud, money laundering, and the manufacture and movement of pirated goods. A 2009 RAND study examined how Hezbollah has benefitted from film piracy proceeds in the tri-border. 40 As reflected in several versions of the State Department annual report on terrorism, U.S. concerns have focused on fundraising activities by Hezbollah and Hamas sympathizers in the TBA, but consistently asserted that that there was no corroborated information that these or other Islamic extremist groups had an operational presence in the region. 41 As noted above, the State Department s 2010 terrorism report asserted more broadly that there were no known operational cells of either Al Qaeda or Hezbollah-related groups in the hemisphere, but noted that ideological sympathizers in South America and the Caribbean continued to provide financial and moral support to these and other terrorist groups in the Middle East and South Asia. 42 In March 36 Iran Planning to Build Missile Base in Venezuela, November 25, 2010, and Venezuela, Iran Press Ahead with Missile Base, May 13, 2011, website of Die Welt online (as translated by Open Source Center). 37 CRS correspondence with Department of State, January 5, 2011, and May 23, 2011; Chávez Mocks Missile Base Reports, CNN Wire, June 1, 2011. 38 Chávez Mocks Missile Base Reports, CNN Wire, June 1, 2011. 39 For additional background, see Threat Convergence in South America s Tri-Border Area (TBA), The Fund for Peace, Center for the Study of Threat Convergence, Factsheet Series, January 11, 2010; and Rensselaer Lee, Dispatches: The Tri-Border-Terrorism Nexus, Global Crime, Vol. 9, No 4, November 2008. 40 Gregory F. Treverton et al, Film Piracy, Organized Crime, and Terrorism, RAND, 2009. 41 U.S. Department of State, Country Reports on Terrorism 2009, August 5, 2010. 42 U.S. Department of State, Country Reports on Terrorism 2010, August 18, 2011, available at http://www.state.gov/s/ct/rls/crt/2010/index.htm Congressional Research Service 12

2011 congressional testimony, General Douglas Fraser, commander of the U.S. Southern Command, maintained that he has not seen Hezbollah or Hamas growing in any capacity in the region, and reiterated that primarily any support that they are giving is financial support, principally back to parent organizations in the Middle East. 43 Allegations have linked Hezbollah to two bombings in Argentina: the 1992 bombing of the Israeli Embassy in Buenos Aires that killed 30 people and the 1994 bombing of the Argentine-Israeli Mutual Association (AMIA) in Buenos Aires that killed 85 people. In November 2006, an Argentine judge issued arrest warrants in the AMIA case for nine individuals: an internationally wanted Hezbollah militant from Lebanon, Imad Mughniyah, and eight Iranian government officials, including former Iranian President Hashemi Rafsanjani. Interpol subsequently posted a Red Notice for Mughniyah, and in November 2007, its General Assembly voted to approve notices for five of the Iranians wanted by Argentina (not including Rafsanjani). The action had been held up since March 2007, when Iran appealed the decision by Interpol s Executive Committee to issue the notices. In February 2008, Imad Mughniyah was killed by a car bomb in Damascus, Syria. In December 2008, an Argentine judge in a civil suit against the Iranian suspects ordered the attachment of six commercial properties in Argentina owned by a former Iranian cultural attaché who is one of the suspects in the AMIA bombing. Figure 2. Tri-Border Area of Argentina, Brazil, and Paraguay Source: CRS. 43 House Armed Services Committee Holds Hearing on the Defense Authorization Proposed Budget Requests for Fiscal 2012 and Future Years on the U.S. Southern Command, U.S. Northern Command, and U.S. European Command, CQ Congressional Transcripts, March 30, 2011. Congressional Research Service 13

Beyond concerns about Hezbollah in the TBA, the Treasury Department, as noted above, sanctioned two Venezuelans in September 2008 for providing financial and other support to Hezbollah (see Venezuela and Iran-Related Sanctions above). On February 10, 2011, the Treasury Department identified the Lebanon-based Lebanese Canadian Bank as a financial institution of primary money laundering concern under the PATRIOT Act (Section 311) for its role in facilitating the money laundering activities of an international narcotics trafficking and money laundering network with ties to Hezbollah. The Treasury Department maintained that the network is involved in moving illegal drugs from South America to Europe and the Middle East via West Africa. 44 U.S. Policy As in other parts of the world, the United States has assisted Latin American and Caribbean nations over the years in their struggle against terrorist or insurgent groups indigenous to the region. For example, in the 1980s, the United States supported the government of El Salvador with significant economic and military assistance in its struggle against a leftist guerrilla insurgency. In recent years, the United States has employed various policy tools to combat terrorism in the Latin America and Caribbean region, including sanctions, anti-terrorism assistance and training, law enforcement cooperation, and multilateral cooperation through the OAS. Moreover, given the nexus between terrorism and drug trafficking, one can argue that assistance aimed at combating drug trafficking organizations in the Andean region has also been a means of combating terrorism by cutting off a source of revenue for terrorist organizations. The same argument can be made regarding efforts to combat money laundering in the region. Although terrorism was not the main focus of U.S. policy toward the region in recent years, attention increased in the aftermath of the 9/11 terrorist attacks on New York and Washington. Anti-terrorism assistance has increased along with bilateral and regional cooperation against terrorism. Congress approved the Bush Administration s request in 2002 to expand the scope of U.S. assistance to Colombia beyond a counternarcotics focus to also include counterterrorism assistance to the government in its military efforts against drug-financed leftist guerrillas and rightist paramilitaries. Border security with Mexico also became a prominent issue in bilateral relations, with attention focused on the potential transit of terrorists through Mexico to the United States. The United States has imposed sanctions on three groups in Colombia (ELN, FARC, and AUC) and one group in Peru (SL) designated by the Department of State as FTOs. Official designation of such groups as FTOs triggers a number of sanctions, including visa restrictions and the blocking of any funds of these groups in U.S. financial institutions. The designation also has the effect of increasing public awareness about these terrorist organizations and the concerns that the United States has about them. As noted above, the United States has included Cuba on its list of state sponsors of terrorism since 1982, pursuant to Section 6(j) of the EAA, and both Cuba and Venezuela are currently on the annual Section 40A AECA list of countries that are not cooperating fully with U.S. antiterrorism efforts, lists that trigger a number of sanctions. 44 U.S. Department of the Treasury, Treasury Identifies Lebanese Canadian Bank Sal as a Primary Money Laundering Concern, Press Release, February 10, 2011. Congressional Research Service 14